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To: rkral who wrote (119884)	6/4/2002 6:01:42 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 152472

ron - it's good that your shaky understanding is shaken. The bill is not recognizing option GRANT expense. It is recognizing EXPENSE as a result of the grant, which expense occurs after the grant at the time of exercise. A subtle fact which the IRS already recognizes but which most investors (yourself included) don't fully understand or (possibly excluding yourself) don't even know how to calculate. It is requiring that companies can not deduct MORE than they have claimed as an expense. Doesn't specify how they claim it. Or what they do. This is a very brilliant construction, IMHO. Brilliant because it will require companies to report ACTUAL stock option compensation, because that's the MAXIMUM they can claim to the IRS. Clearly they would not be acting in shareholders best interest if they claimed less than they were entitled to. And you can bet your bottom dollar they are incented not to hurt earnings by so much as a tenth of a penny too much. It's not the first time companies have had to estimate what they will receive or pay in the future and then had to correct along the way as reality unfolded. There are many issues with doing this, some of them more legitimate than others. But the fact that you and I have been debating stock option compensation for several months and you are only now beginning to realize how much you know or don't know... well, if you consider yourself one of the smarter guys (and I do), then imagine how much of this the rest of the investing public understands. John